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Johannesburg - Nedbank Group said on Thursday it will acquire a 20% stake in pan-African lender Ecobank Transnational for $493m (about R5.54bn) in cash, ending months of speculation the South African bank could walk away from the deal over governance concerns.
Nedbank, South Africa's fourth-largest lender, had a right to take the stake under the terms of a 2011 loan to Ecobank. But a crisis over corporate governance and the departure of Ecobank's chief executive in March raised questions about whether Nedbank would go through with the deal.
The acquisition puts Togo-based Ecobank in the rare - and potentially difficult - position of having two strategic shareholders. Qatar National Bank (QNB) last month raised its holding in Ecobank to 23.5%, making it the top shareholder.
Like Nedbank, QNB is looking to expand its presence in fast-growing sub-Saharan Africa.
Nedbank said in a statement it will pay $493.4m for 4.5bn new Ecobank shares, valuing Ecobank at 10.93 US cents a share, a 4% discount to its price on the Nigerian Stock Exchange at the end of September.
Nedbank chief executive Mike Brown told Reuters in August that Ecobank had made "enormous progress" in resolving its governance issues.
Togo-based Ecobank has a presence in nearly 40 sub-Saharan countries, meaning the deal would broaden Nedbank's reach well beyond its core South African market.
*Rand/dollar exchange rate of R11.24 used.
This article has been updated to correct the exchange rate conversion.
